SEC Keeps Solana Security Status Unclear, Here’s What Experts Say

The U.S. Securities and Exchange Commission (SEC) recently retracted its request to classify Solana (SOL) as a security in a Binance case. Nonetheless, Variant Fund’s chief legal officer, Jake Chervinsky, thinks the regulator still does not clearly label the cryptocurrency as non-security.

Chervinsky said in a post on X that the latest actions taken by the financial authority do not imply that it has decided SOL is not a security.

This development stems from the SEC’s move to amend its complaint about the “Third Party Crypto Asset Securities,” therefore indicating to the court that it no longer seeks a decision on whether the tokens listed in the case are securities. He noted that other lawsuits, including its ongoing case against Coinbase, indicates that the SEC still classifies these cryptocurrency as securities.

The SEC has named many tokens—including Solana, BNB, Cardano, and Polygon—as securities in its complaint against Binance. The regulator has alleged at least 68 tokens are securities.

Others Agree

Supporting Chervinsky’s viewpoint, Miles Jennings, general counsel at a16z Crypto, and Justin Slaughter, policy director at Paradigm, also chimed in. Slaughter argued that the SEC’s submission is being taken too literally and does not inevitably show a change in its position on Solana and related tokens.

Jennings added that Judge Amy Berman Jackson, presiding over the Binance case, set a particularly high bar for applying the Howey test, which the SEC uses to determine if an asset is a security. This high standard made it less desirable for the regulator to classify these tokens as securities in this particular context.

Politically Motivated Move

Jennings further noted that Judge Katherine Polk Failla, overseeing the Coinbase lawsuit, seems more receptive to the SEC’s arguments. Therefore, it would be cleverly advantageous for the SEC to concentrate its activities there instead. He expressed skepticism about the SEC’s ability to establish a strong enough link between token sales on secondary markets and the managerial efforts of token issuers.

Jennings speculated that the SEC’s actions are politically motivated, based on his insider knowledge of the agency’s behavior behind the scenes.

Spot Solana ETF Buzz

Meanwhile, the crypto world is humming with hope about the possible launch of a Solana ETF. This excitement follows recent filings by prominent asset management firms VanEck and 21Shares, which have applied to the SEC to introduce a spot Solana ETF. These developments come in the wake of the recent approvals of spot Bitcoin and Ether ETFs.

Currently, the SOL token is trading around $178, marking an impressive increase of over 600% in the past year. With a market cap of $83 billion, Solana is the fifth-largest cryptocurrency by market cap. However, in the short term, the token has seen a slight dip, down 2.6% in the past 24 hours.